Key Highlights

  • Adjusted diluted EPS of USD 0.50 fell from USD 0.84 and missed the consensus estimate of USD 0.61.
  • Revenue of USD 3.3 billion dropped 5.1% year over year, below the consensus estimate of USD 3.36 billion.
  • GAAP diluted loss per share was USD 0.09 after USD 111 million of pre-tax non-cash Impairment charges.
  • Europe segment EBITDA fell USD 94 million to USD 68 million, and the company withdrew full year 2026 guidance.

LKQ Corporation (NASDAQ:LKQ) reported third quarter 2026 adjusted Diluted Earnings per Share of USD 0.50, below a consensus estimate of USD 0.61 and down from USD 0.84 a year earlier. Revenue of USD 3.3 billion fell 5.1% from USD 3.5 billion and landed under the consensus estimate of USD 3.36 billion. On a GAAP basis the company posted a diluted loss of USD 0.09 per share, compared with earnings of USD 0.69, and a net loss of USD 24 million against Net Income of USD 178 million.

The GAAP result includes USD 111 million of pre-tax non-cash charges, made up of a USD 88 million Goodwill impairment in the Specialty segment and USD 23 million tied to net Assets held for sale in Romania. Adjusted net income was USD 127 million versus USD 216 million. Parts and services organic revenue declined 5.4%.

Europe Drives the Shortfall

The chief financial officer attributed the decline mainly to Europe, citing ERP implementation problems in Germany and Volume losses in the United Kingdom and Benelux. Europe organic revenue fell 9.8%, an improvement on a 12.6% decline in the second quarter. Segment EBITDA was USD 68 million at a 4.6% Margin versus 10.0% a year ago. The German ERP disruption cost about USD 95 million of revenue and roughly USD 43 million of EBITDA in the quarter.

North America organic revenue declined 2.4%, yet segment EBITDA was USD 203 million and the margin rose 40 basis points to 14.4%, with gross margin at 42.3%. Alternative part utilization reached a record of nearly 41%. Specialty grew organically by 90 basis points, but EBITDA was USD 25 million at a 5.5% margin, about 180 basis points lower, on freight and fuel costs and integration challenges from an Acquisition completed in the second quarter.

Leadership Changes and Withdrawn Guidance

The board appointed Sal Abbate as President and Chief Executive Officer effective December 15, 2026, and an interim office of the chief executive made up of two directors leads the company until then. It also engaged Alvarez and Marsal to advise on European operations, with a mandate to stabilize operations including the ERP-related issues. The company withdrew full year 2026 guidance, last updated on July 30, 2026, and suspended the strategic review, including the Specialty segment sales process, so the new Leadership team can assess the business.

Cash generation held up. Operating Cash Flow was USD 411 million and free cash flow USD 372 million for the quarter. Total Debt was USD 3.7 billion with Leverage of 2.8 times EBITDA, and Liquidity was about USD 1.7 billion. The company repurchased 1.2 million shares for USD 30 million, paid USD 76 million of dividends, and extended its repurchase program through October 25, 2028, with USD 1.5 billion remaining.

Data Points Behind the Next Report

Germany is the first reference, where sales run near 85% of the prior year on a per day basis and on-time in-full delivery reached 95% across Europe. Europe EBITDA margin of 4.6% against 10.0% a year ago is the second measure, along with the 9.8% organic revenue decline.

December 15, 2026 is the third dated item, when the new chief executive takes office. A quarterly Dividend of USD 0.30 per share payable on December 3 to holders of record on November 19 is the fourth, alongside the status of the suspended guidance and strategic review.